SMC 2023 net income soars 67% to ₱44.7B

MANILA, Philippines — San Miguel Corp (SMC) posted a 67-percent increase in its 2023 consolidated net income to P44.7 billion.

In a statement, SMC said this was driven by significant volume growth across its key businesses, including San Miguel Brewery, Inc., Ginebra San Miguel Inc., Petron and SMC Infrastructure, and the integration of Eagle Cement Corp.’s financial results.

SMC’s strategic focus on operational efficiencies and sustainability initiatives contributed to a 24-percent increase in Ebitda (earnings before interest, taxes, depreciation and amortization) to ₱205.3 billion and a 34-percent rise in consolidated operating income to ₱144.5 billion.

“Our robust performance again reflects our resilience and ability to deliver a strong bottom line despite macroeconomic uncertainties, and our commitment to continue investing on nation-building projects,” SMC President and CEO Ramon S. Ang, said.

Food and beverage

San Miguel Food and Beverage Inc. (SMFB) generated revenues of ₱379.8 billion, up 6 percent from the previous year, with all business units reporting sales growth on account of improved volumes and pricing strategies.

Ebitda went up 7 percent to ₱66.8 billion, while net income rose 10 percent to ₱38.1 billion, the highest achieved by the group since SMFB’s consolidation in 2018. Consolidated operating income was down 1 percent at ₱48.4 billion, as the decline in the food business weighed down the strong performance of the beverage segment.

READ: SMFB profit up 10% to P38.1B in 2023

SMB posted an 8-percent increase in consolidated sales to ₱147.3 billion, fueled by an 8-percent and 7-percent sales growth in the local and international markets, respectively.  Net income stood at ₱25.3 billion, up 16 percent from 2022.

GSMI revenues rose 13 percent to ₱53.6 billion last year. Operating income was up 14 percent to P6.8 billion while Ebitda and net income jumped 41 percent and 55 percent to P9.4 billion and P7 billion, respectively.

The food group booked revenues of ₱178.8 billion, up 2 percent from the previous year.

Power unit

San Miguel Global Power reported a 23-percent decline in revenues to ₱169.6 billion, as a result of lower contracted volumes and prices due to reduced fuel tariffs. Operating income was up 13 percent to ₱32.5 billion due to lower cost of supply, and exposure to better spot prices during the period.

READ:Three tycoons sign $3.3-billion energy deal

Better operating margins were also accompanied by forex gains for the year versus forex losses in 2022. As a result, net income tripled to ₱9.9 billion from ₱3.1 billion in 2022. Ebitda grew to ₱22.3 billion, up 34 percent from the previous year.

Fuel and oil

Petron’s continuing efforts to sustain demand recovery, optimize assets and resources, and respond to market volatility, resulted in a 60-percent increase in operating income to ₱30.7 billion from ₱19.2 billion in 2022. Net income jumped 51 percent to P10.1 billion from P6.7 billion in the previous year.

The company delivered combined 2023 sales volumes of 126.9 million barrels, 13 percent higher than the 112.8 million barrels sold in 2022, fueled by its wide presence and effective volume-generation strategies both in the Philippines and Malaysia.

Despite higher sales volume, Petron’s revenues slipped by 7 percent to ₱801 billion from ₱857.6 billion in 2022, as prices continued to correct from record-high levels in 2022. The full-year average price of benchmark Dubai crude stood at $82 per barrel in 2023, down 15 percent from $96 in 2022.

Infrastructure

SMC Infrastructure registered consolidated revenues of ₱34 billion, 17 percent higher than the previous year. This was mainly brought about by sustained growth across all operating toll roads. Combined average daily traffic volume reached 1.0 million vehicles, up 8 percent from 2022 level.

READ: SMC bullish on food, power and infra

Operating income surged 25 percent to ₱17.7 billion  while net income increased 33 percent from ₱11.4 billion in 2022.

Cement

The cement business, comprised of Eagle Cement Corp, Northern Cement Corp, and Southern Concrete Industries Inc., posted a four-fold growth in consolidated revenues to ₱37.2 billion in 2023, mainly due to the full-year consolidation of Eagle in 2023, and the start of commercial operations of their new facility in Davao del Sur. Operating income hit P6 billion from a loss in the previous year.

In it statement, the conglomerate said it remains confident in its ability to efficiently manage its business and continue to deliver sustainable value, amid continuing market uncertainties.

SMC is optimistic that the country’s robust macroeconomic fundamentals and its strategy, anchored on our sustainability agenda, will sustain growth momentum throughout 2024, it said.